Real Estate Advantage

A loan for a new house has an origination fee of one point. If the loan is for $275,000, what would the cost of that point be?

$2,750

Mr. and Mrs. Conners sold their home and paid an 8% commission to their realtor. Assuming no other fees, if they walked away from the sale with $306,000, about how much did their house sell for?

$332,600

How many square feet are in an acre?

43,560 square feet

If a borrower puts down 10% on their home loan, what is the loan-to-value ratio?

90%

A mortgage lien is placed on real estate by

A lender in exchange for funds to buy the real estate

The listing period for a single family home vs. a commercial property differs in that:

A single family home is typically listed for 60-120 days whereas a commercial property is typically listed 6 months-1 year.

How does an ARM mortgage differ from a fixed rate mortgage?

ARM stands for adjustable rate mortgage, whose rate may vary with changes in interest rates

A contract can become voidable if one of the parties was being victimized because _____________.

All of these: They were misled, they were a minor, or they did not agree voluntarily.

A foreclosure sale is

An auction sale to the highest bidder

________ are rights and privileges belonging to the land.

Appurtenances

Sarah owns a warehouse and has decided to sell it as an open listing. She has contacted three brokers to sell it for her, Brokers A, B, and C. If Broker B makes the sale, who gets the commission?

Broker B

Which lien is required by law to be paid first?

Delinquent property taxes

Which of these is not a type of leasehold estate?

Estate in perpetuity

Which government entity was created to encourage low-income housing?

GNMA (Ginnie Mae)

Which of the following is not true regarding a contract of sale?

It must be notarized.

Broker Katie obtains an exclusive agency listing with seller Steve. Katie creates marketing materials and runs open houses for Steve's home. Then, Steve finds a buyer on his own and sells the house without Katie's help. What fee is Katie owed?

Katie has not earned a fee

Real property is defined as __________.

Land and anything that is permanently affixed to it. Personal property includes items that can be moved.

A buyer and seller agree to wait until the seller's listing is expired to make the sale in order to avoid paying the broker his share. How can the broker get his commission?

Prove in court he was the procuring cause of sale.

Which type of deed contains no warranties at all?

Quitclaim deed

Most Real Estate loans deal with simple interest, the formula for which is _________.

Rate x Loan = Annual Interest

A subdivision has a rule that each home in the neighborhood be at least 2,500 square feet. This is an example of which concept?

Restrictive covenant

According to HUD standards, which of the following would be an acceptable neighborhood advertisement?

Senior Housing

An agency contract is being terminated. In which scenario might there be damages owed to one of the parties?

The agent resigns from the contract because he is overloaded with homes to sell.

Which of the following describes a transaction brokerage?

The broker does not represent either party, but provides general information and services to each.

What information would be unethical for a listing agent to share with a potential buyer?

The seller is very eager for an offer because he lost his job and found a new one in a different state.

Why are net listings generally frowned upon in the real estate industry?

They can lead to brokers taking advantage of property owners.

___________ indicates ownership of property, in real estate terms.

Title

How does a home equity line of credit differ from a second mortgage?

With a home equity line of credit the borrower can draw money as they need it.

Mr. and Mrs. Cox make Mr. and Mrs. Green an offer on their home, but they have not heard back from them on whether or not the offer has been accepted. In the meantime, they have found another home they would like to purchase instead. What is their best option?

Withdraw their offer with no penalty.

On a loan with a variable interest rate, the rate is usually tied to ____.

a benchmark rate, such as LIBOR or the interest rate that a Treasure bond pays

According to Fair Housing laws, which of these people is not considered disabled?

a former convict

What financial instrument is given by a borrower to the lender as promise to repay a debt?

a note

The annual percentage rate is

a rate that includes interest expense plus any fees or extras that are included in the loan amount

Which of the following is never allowed?

a salesperson with an expired license presenting an offer.

A VA loan would most likely be used by

a veteran or active-duty member of the US military.

A good example of an implied contract is _______________.

after a written lease expires, rent is paid and the check cashed.

When a principal doesn't stop an agent from going beyond his or her normal line of duties, this is called

agency by estoppel

When an agreement is formed between an agent and a principal after a sale is confirmed, this is called

agency by ratification

When an agent is invested in a project outside his or her agent status, this is called ___________

agency coupled with an interest

Some state have _______ that require agents to disclose who they are representing to the buyers.

agency disclosure laws

Who takes the biggest risk in an open listing?

agent

Which of the following is an example of dual agency?

an agent who represents both the buyer and the seller.

Gradual liquidation through periodic payments of principal and interest is called?

an amortized loan

The Americans with Disabilities Act of 1990 would affect which of the following?

an existing business with 20 employees.

A mortgage broker's primary role is to

bring borrowers and lenders together

When real estate agents represent the buyer and not the seller of a piece of property, they are engaging in

buyer agency

__________ were put in place to make sure that property buyers' rights are protected.

buyer agency agreements

Mortgage lenders make their money by

charging loan origination fees, annual loan servicing fees, and application fees.

What are the four elements required of every valid and enforceable contract?

competent parties; legal purpose; offer and acceptance; and consideration

Which is not on of the "three C's" of underwriting?

conformity

A buyer agrees to purchase a home once the sale on her current home is completed. Legally this is known as ______________.

contingency

Where is a deed recorded?

county courthouse

All of these are good examples of severance except

dividing a single room into two rooms

IF you are representing both the buyer and the seller of a piece of real estate its called ______.

dual agency

Deed restrictions and easements on a property are considered _______ when written into the deed.

exceptions and reservations

When a homeowner reserves the right to sell his or her own property, but offers the exclusive right for only one agent, this is a(n)

exclusive agency listing

When a broker is given the right to collect the commission, no matter who sells a property, this is a(n)

exclusive right to sell listing

When the agent and the principal agree that the agent will represent the principal, it is called

express agency

What is the primary advantage of a biweekly mortgage?

faster loan payoff

The ________, also known as the words of conveyance, includes the words that describe exactly what rights the grantee is receiving.

granting clause

In a real estate transaction, the ________ is the current owner of the property and is conveying his or her property to someone else.

grantor

What part of a deed limits the amount of the estate granted?

habendum

When the agent and principal have not officially agreed that the agent will represent the buyer, but their actions imply this, it is called:

implied agency

Foreclosure occurs when a ____ seizes and sells a borrower's ____ after the borrower has failed to ____ the lender.

lender, collateral, repay

When a broker is hired to sell a property for a minimum price, then keep anything over that price, this is a(n)

net listing

A borrower in a title theory state repays his loan in full, and fulfills any other obligations of the loan. The lender now holds _________.

no title

Which of the following is a violation of the Fair Housing Act?

not allowing a service dog in an apartment complex that doesn't allow pets

A ___________ is a promise of real property, kept by the lender to secure the loan.

note

Substituting a new obligation for an existing one with the intent to cancel the latter is called ____.

novation

When a property owner wishes to use multiple agents to sell a property, this is a(n)

open listing

When dividing a single plot of land into two or three units, the process is called _____, and the units are called _____.

partitioning; parcels

Subprime loans are usually an option for

people with subpar credit and come with a higher interest rate

PITI

principal, interest, prorated taxes by month, and insurance by month

Buyers should receive a settlement statement ____.

prior to closing

When acting on behalf of a principal, an agent must ____.

put the principal's interests before their own

Which of these is a tool the Federal Reserve can use to control/influence monetary policy and supply?

raising and lowering reserve requirements for banks, buying and selling securities on the open market, and setting the discount rate

Which of the following is not a requirement for a deed to be valid?

recording in a county courthouse

A reconveyance deed

removes a lien and is evidence a trust deed has been paid in full when it is signed by the trustee

A reverse mortgage

requires participant to be 62 or older and converts equity into cash

When a property is released from a mortgage because it has been paid off by the borrower, what document does the lender provided to prove this to be true?

satisfaction piece

Which of the following would not be considered a finance charge?

seller's points

In a ________, the real estate agent represents only the buyer or the seller of a piece of property.

single agency relationship

Real estate agents will earn their money once a piece of property is

sold or exchanged.

Who is the typical reverse mortgage customer?

someone elderly, with a lot of equity in their home, or someone without a lot of liquid capital

A real estate agent declines to show a Muslim couple a house in a neighborhood because she feels the area isn't Muslim-friendly. This is known as

steering

A homeowner is buying a new home but hasn't sold their old one. Which type of loan would they obtain in the short term and pay back as soon as their old house is sold?

swing loan

Which part of a traditional deed contains warranties?

testimonium

A promissory note must contain the following three things:

the amount of the loan, the term of the loan, and the interest rate of the loan

The financed amount is ________________

the entire loan amount, minus prepaid fees and the downpayment, plus extras such as fees being financed

Who is responsible for establishing the listing price of a property?

the property owner

Under lien theory, the mortgage receives _____________.

the right to place a lien on the property.

Who usually pays a real estate commission?

the seller of the property

What is the purpose of underwriting?

to determine the risks of making a loan

What is the main purpose of regulation Z?

to let borrowers know the true cost of credit

__________ is when an individual can be paid for brokering a real estate transaction, yet represent neither the buyer nor the seller.

transactional brokerage

When ownership of a piece of real estate goes from one person to another, it is called

transfer

Joan sells her house to her brother Mike on a handshake. This contract is:

unenforceable

Which of these is a fixture?

window blinds

A mortgage is a

written contract pledging real property owned to secure a debt

An express contract can be _________.

written or oral, as long as the terms are clearly stated.